MGE rate plan sparks protest at utility HQ

Saying they expect better from a “community energy company,” a group of MGE customers plan to rally near the utility headquarters Thursday at noon to protest proposed billing and rate changes.

MGE is looking to raise the fixed charges on customer bills and reduce charges for the amount of electricity used — a move critics say will discourage energy conservation while hitting low-income and elderly residents the hardest.

For the typical residential customer, the fixed charge would increase from the current $10.50 to $19 if the plan is approved by the state Public Service Commission. Future increases could take the fixed charge higher, although MGE has backed off from an earlier plan to charge $69 per customer by 2017.

Still, rally organizers say the MGE rate plan runs counter to calls from its own customer base for more solar and wind power. They will gather at the corner of East Wilson Street and John Nolen Drive near the company headquarters on Blount Street.

“This billing scheme is tied to an old business model and totally flies in the face of where our community is,” says Don Ferber of RePower Madison, a clean energy group affiliated with the local chapter of the Sierra Club.

MGE and electric utilities nationwide are feeling cost pressures with the growth of renewable energy coupled with increased efficiencies. At the same time, MGE says it must maintain the electric system and is looking for a way to fairly spread those costs among all customers — not just those who use large amounts of power.

“MGE continues to be firmly committed to energy conservation, promoting renewable energy and protecting low-income customers,” company spokesman Steve Kraus wrote in an email. “Our rate request is consistent with what is a national policy discussion to effectively and equitably ensure the energy grid can reliably meet all customer needs and incorporate future distributed generation such as solar power.”

MGE has dramatically softened its initial proposal that could have taken residential customer fixed charges to nearly $70 a month by 2017. Under an agreement worked out with the Citizens Utility Board, MGE agreed to cap its customer charge increase at $19 in 2015 and negotiate future hikes with consumer and energy groups.

Under the compromise plan, the typical MGE residential customer using 550 kilowatt hours of electricity monthly would see a $2.80 increase in their monthly bill in 2015. The company has also taken steps to protect low-income and existing solar customers in its rate request.

The state Public Service Commission is due to take up the MGE case next month. Comments on the case are due by Oct. 8 with the public hearing on the proposal set for Oct. 9.

A variety of groups have already filed comments on the case, including the city of Madison which has hired an outside expert to argue against the MGE rate changes.

“This MGE proposal will move the city of Madison in exactly the opposite direction that the city wishes to go,” writes city consultant William Marcus, an economist for JBS Energy of West Sacramento, Calif.

Renewable energy groups have also gotten into the fray, arguing that MGE’s rate plan will stifle investment in clean energy and leave Wisconsin farther behind in that key economic sector.

“MGE’s proposed approach would push the market down a path that discourages innovation and competition at a time when other states are encouraging this type of development,” says Susan Crawford, an attorney for Wind on the Wires.

Rally organizer Ferber says MGE customers have been clear about their support for renewable energy through participation in the utility’s popular green power program. But he notes that 88 percent of MGE’s electricity supply is generated by fossil fuel burning — either coal or natural gas.

“We want the company to be forward looking but they have no plans for the future and that is not a good place to be,” he said, noting rising fuel costs and potential carbon emission charges going forward.

MGE’s Kraus counters that the company is committed to its customers and plans to unveil a series of community meetings next year to focus on the key issues that have come out of the rate case.

“It will be modeled after the Community Energy Conversations we did across Dane County in the early 2000's,” he says.

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Mike Ivey

Mike Ivey has been a reporter with The Capital Times for more than 25 years, covering business, the environment and politics. He was named the state's top business reporter in 2011 by the Wisconsin Newspaper Association.

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